Further erosion of the tattered employer-based system
Health Affairs
September 9, 2004
Health Benefits In 2004: Four Years Of Double-Digit Premium Increases Take Their Toll On Coverage Five million fewer jobs provided health insurance in 2004 than in 2001, this new analysis finds.
By Jon Gabel, Gary Claxton, Isadora Gil, Jeremy Pickreign, Heidi Whitmore,Erin Holve, Benjamin Finder, Samantha Hawkins, and Diane Rowland
Health insurance premium increases:
Premiums increased 11.2 percent from spring 2003 to 2004, making 2004 the fourth consecutive year of double-digit premium increases. Premium increases outpaced the economy-wide rate of inflation and increase in workers’ hourly earnings by almost nine percentage points. During the past four years,the cost of health insurance has increased 59 percent.
Cost of coverage:
The average monthly cost of single coverage rose to $308 ($3,695 annually) for single coverage and to $829 ($9,950 annually) for family coverage in 2004.
Employee cost sharing:
Contributions for family coverage rose from $201 in 2003 to $222 in 2004, an increase of 10 percent.
Interest in new plan arrangements:
There has been considerable interest in “consumer-driven health plans” over the past few years. A common approach pairs a plan with a relatively high deductible (such as $1,000) with a savings account option.
Availability of coverage:
The offer rate among small employers continues to drift downward, with just 63 percent of small firms offering coverage in 2004, compared with 65 percent in 2003 and 68 percent in 2000 and 2001. The offer rate among large employers remains high at 99 percent.
Employers’ attitudes and views about the future:
Although it appears that relatively few employers are engaged in explicit practices that could discourage the take-up of family coverage, more than 40 percent of all firms, including more than 72 percent of large firms, reported that they are very or somewhat likely to increase the percentage of the premium that employees must contribute for family coverage.
Outlook for the future:
More employers are familiar with and offer consumer-driven health plans In 2004 than in 2003. A growing number of workers are employed in firms with the option to enroll in such a plan. Increased interest in high-deductible plans suggests that this trend will continue.
…monthly contributions for health insurance, deductibles, and copayments have risen in absolute dollars over the past four years. Most importantly, after four years of double-digit premium increases, the cost of health coverage has risen to levels that have further eroded the already tattered employer-based system.
http://content.healthaffairs.org/cgi/content/full/hlthaff.23.5.200/DC1
Comment: How much more erosion of the tattered employer-based system are we going to accept before we decide that must enact structural changes that could ensure that everyone would have affordable access to comprehensive health care?